Blockchain’s introduction to the rise of Southeast Asia’s gig economy
Making work more adaptable to the needs of the moment
What is the gig economy?
For years, the norm of having a job has been either on permanent full or part time basis, but recently more and more people are beginning to take on a variety of short term jobs also known as gigs. These include freelancing, temporary jobs, jobs in the sharing economy and more. All of these different jobs form part of the gig economy. Therefore, the gig economy is one that describes an environment where people work for others as independent contractors. They set their own hours, choose their own clients and work on individually paid project basis rather than a monthly salary. This working environment gives extreme freedom with you deciding what you do, who you work for and how much you charge.
The Southeast Asian Market
Latest statistics compiled by global talent outsourcing and consultancy group KellyOCG show that one third of workers in the world are working as free agents in the gig economy. Employers are also benefiting from this economy as they have the ability to hire experts and paying them just for services when they are needed. Statistics show that 43% of global companies that hired free agents for their business operations managed to reduce labor costs by 20%. The looming markets of Southeast Asian economies make for the perfect independent workforce. Countries like Vietnam and Indonesia both experienced high economic growth with rates 59.6% and 50.9% respectively.
The only problem individuals might face during the gig stage is fairness. Freelancers are sometimes not taken seriously by clients. This problem can be solved by considering blockchain technology. Blockchain technology makes it fairer for both sides and facilitates the growth of the gig economy. In 2018, a study by PayPal revealed that 58 percent of freelancers in four Southeast Asian markets (Singapore, Philippines, Indonesia, and Vietnam) have experienced not being paid. Rahul Shingal, managing director of PayPal Southeast Asia said, “We are seeing more young people choosing to freelance,” adding that “as they become integral to the global economy, it is critical for them to be accorded the same respect that other professionals receive. We should do more to elevate the standing of freelancers as a community and empower them in their autonomy.” Even though the gig economy faces some difficulties it is still expanding. Figures released by Malaysia’s Employees’ Provident Fund (EPF) show that the domestic gig economy grew an impressive 37% in 2017.
Blockchain facilitating the gig economy in SEA
Blockchain technology is quickly transforming the way we manage data. One of the most common gigs one can take up is that of ride-hailing services. Blockchain action in SEA’s gig economy has taken place primarily in its transportation sector, particularly in the domain. Many taxi services based on blockchain technology will soon keep springing up. This is largely due to the various benefits that blockchain technology offers, especially in the area of personal control and decentralisation.
Utilizing blockchain can bring many business benefits especially in this sector. Some of which include reduced costs due to the elimination of a third party, improved traceability, enhanced security, as well as greater transparency. Malaysia saw the launch of a new platform six months ago – Decentralised Alternative Cabs Serving and Empowering Everyone. This was a huge success as booking rates shot up by almost 800% and the platform was valued by investors at more than US$100 million. Building on its success, DACSEE is planning to make further inroads in SEA’s ride-hailing market by expanding its operations to Thailand as well as penetrating the Asia-Pacific (APAC) market through South Korea.
Creating an ideal job
The gig economy is beginning to take up a larger portion of the work force and studies show no sign of it slowing down, this is partially due to the evolution of technology. Companies are now able to hire workers from anywhere in the world who can then easily telecommute and work remotely for them. Mobile apps have allowed businesses to grow an enormous amount of contract workers and social media has given people the ability to market themselves and sell their products and services at a much cheaper cost than traditional advertising. Blockchain offers a solution to fill the gaps of benefits and connecting on-demand employees with on-demand employers.
Employees typically prefer the flexibility of hours and employers prefer the freedom of project based hiring. This system may eventually be the main way that businesses are carried out. It’s hard to say exactly how the rise of the gig economy will affect and change the future of the job market but what we do know is that companies and workers need to adapt to it.
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